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Question 3 On January 1, 2017, the ledger of Sandhill Co. contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $43,500 7,100 20,000 During January, the following selected transactions occurred Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 596, $18,000 note. Sold merchandise for cash totaling $5,300, which includes 6% sales taxes. Performed services for customers who had made advance payments of $10,600. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2016, $7,100 Sold 600 units of a new product on credit at $46 per unit, plus 6% sales tax. 5 12 14 20 During January, the company's employees earned wages of $72,900. Withholdings related to these wages were $5,577 for Social Security (FICA), $5,207 for federal income tax, and $1,562 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31. Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable. SANDHILL CO Balance Sheet (Partial) January 31, 2017 Current Liabilities Accounts Payable Sales Taxes Payable Interest Payable Salaries and Wages Payable Federal Income Taxes Payable State Income Taxes Payable Notes Payable Unearned Service Revenue

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